More Chapter 13 Mortgage Mediation Insights

My last post discussed a bankruptcy seminar which promoted  advantages of court ordered mediation in the context of a Chapter 13 bankruptcy. Here are a some additional interesting points I heard from various seminar speakers (in no particular order)

• Your mortgage servicer makes more money when your mortgage goes into default. Maybe this is one reason why your mortgage services insists that you be at least 90 days late before they will discuss short sales or modifications;

• All the legal defenses and counter claims against your mortgage company which your attorney can assert in a state court foreclosure case can also be asserted in Chapter 13 bankruptcy through an objection to the mortgage companies bankruptcy claim. For example, you can object to the mortgage company’s bankruptcy claim on the grounds of a lost promissory note or improper assignment of the mortgage to the mortgage investor;

• There are new software programs which permit homeowners to upload financial documents to an online “file cabinet” and provide access to their mortgage lender. The software should help homeowners prove the date that they provided requested documents and help lenders organize and  keep track of documents provided from their borrower.

• Our local mortgage mediation program started about one year ago. Chapter 13 debtors who filed bankruptcy before the program started can still request mortgage mediation any time up to their discharge at the end of their Chapter 13 plan. Attorneys may want to contact earlier clients who are involved in ongoing Chapter 13 cases to see if they are interested in mediation of their first mortgage payment.